Public Bill Commitee

[Mr. Bill Olner in the Chair]

Bill Olner: I was sitting in the back this morning when the previous Chairman gave Committee members the opportunity to remove their jackets. That still stands this evening.

Clause 3

Members

Vincent Cable: I beg to move amendment No. 30, in page 2, line 3, leave out ‘Treasury’ and insert ‘Cabinet Office’.

Bill Olner: With this it will be convenient to discuss the following amendments: No. 31, in clause 3, page 2, line 4, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 32, in clause 3, page 2, line 7, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 33, in clause 3, page 2, line 9, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 34, in clause 3, page 2, line 11, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 35, in clause 3, page 2, line 13, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 36, in clause 4, page 2, line 29, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 37, in clause 4, page 3, line 3, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 38, in clause 4, page 3, line 5, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 122, in clause 10, page 5, line 15, at end insert—
‘(e) the Cabinet Office.’.
No. 39, in clause 11, page 5, line 39, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 40, in clause 27, page 11, line 2, leave out ‘Chancellor of the Exchequer’ and insert ‘Prime Minister’.
No. 41, in clause 27, page 11, line 13, leave out ‘Chancellor of the Exchequer’ and insert ‘Prime Minister’.
No. 42, in clause 27, page 11, line 20, leave out ‘Chancellor of the Exchequer’ and insert ‘Prime Minister’.
No. 44, in clause 27, page 11, line 27, leave out ‘Chancellor of the Exchequer’ and insert ‘Prime Minister’.
No. 45, in clause 27, page 11, line 29, leave out ‘Chancellor of the Exchequer’ and insert ‘Prime Minister’.
No. 46, in clause 27, page 11, line 41, leave out ‘Chancellor of the Exchequer’ and insert ‘Prime Minister’.
No. 47, in clause 44, page 19, line 6, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 48, in clause 44, page 19, line 35, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 49, in clause 44, page 19, line 41, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 50, in clause 44, page 19, line 42, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 51, in clause 44, page 20, line 6, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 72, in clause 44, page 20, line 8, leave out subsection (11).
No. 73, in clause 44, page 20, line 8, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 74, in clause 44, page 20, line 14, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 75, in clause 44, page 20, line 14, leave out ‘Chancellor of the Exchequer’ and insert ‘Prime Minister’.
No. 76, in clause 44, page 20, line 17, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 77, in clause 44, page 20, line 17, leave out ‘Chancellor of the Exchequer’ and insert ‘Prime Minister’.
No. 52, in clause 44, page 20, line 18, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 53, in clause 47, page 22, line 6, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 54, in clause 47, page 22, line 16, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 55, in clause 47, page 22, line 18, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 56, in clause 47, page 22, line 19, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 57, in clause 47, page 22, line 24, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 58, in clause 47, page 22, line 28, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 59, in clause 48, page 22, line 33, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 60, in clause 48, page 23, line 21, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 61, in clause 48, page 23, line 28, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 62, in clause 48, page 23, line 31, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 63, in clause 49, page 24, line 17, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 64, in clause 49, page 24, line 19, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 65, in clause 50, page 25, line 7, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 66, in clause 50, page 25, line 9, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 67, in clause 55, page 27, line 13, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 68, in clause 58, page 28, line 17, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 69, in clause 62, page 29, line 4, leave out ‘Treasury’ and insert ‘Cabinet Office’.
No. 70, in clause 62, page 29, line 13, leave out ‘Treasury’ and insert ‘Cabinet Office’.

Vincent Cable: Welcome to the Chair, Mr. Olner. You have arrived for one of the more controversial debates after a fairly quiet morning. The theme of the amendments relates to the residual ministerial powers vested in the Treasury. My colleagues and I have tabled this string of about 40 amendments, which are also supported by the hon. Member for Chipping Barnet and her colleagues, to question the location of the residual ministerial powers.
I stress from the outset that I do not see this as an opportunity for Treasury-bashing or bashing this particular Chancellor. As the Financial Secretary pointed out on Second Reading, the Treasury has a good record in recent years of being willing to distance Ministers from day-to-day decisions, most importantly in the case of the Monetary Policy Committee and in financial regulation.
Although there are undoubtedly lots of quibbles with appointments and the efficiency with which they have been made, I would not argue that any of the major appointments, particularly to the MPC, have been characterised by cronyism or political bias. They have all been driven essentially by merit and relevant qualifications. I am not having a go at the Treasury for how it discharges its existing responsibilities. However, it is important to stress from the outset that although the Bill will separate the National Statistician, his staff and statisticians in general from political interference to some degree, substantial ministerial powers none the less remain. A run through the amendments will bring to light how important those residual powers are.
Amendments Nos. 30 to 38 deal with clauses 3 and 4, which discuss appointments. As we were reminded this morning, appointment is not just a process of putting forward names; it is also about ministerial discretion over board numbers and dismissal. Ministerial residual powers respecting pre-release are dealt with in amendment No. 39, and amendments Nos. 40 to 47 deal with powers of direction in the event that the board fails in its statutory responsibilities. There are ministerial powers for the disclosure of information to the board, addressed in amendments Nos. 47 to 53, and by the board, in amendments Nos. 59 to 62. Amendments Nos. 53 to 58 deal with ministerial powers in the use of information, amendment No. 77 with particular powers in relation to the devolved authorities and transfers of property to the board and amendment No. 68 with powers relating to remuneration and general orders and obligations. A wide variety of residual powers will still be exercised by the relevant Minister, in this case the Chancellor, and the Treasury.
Why do I argue that the Treasury is not the best place for the powers? There are two main reasons. The first is that many Government statistics—probably the majority, but certainly a very large part—have nothing to do with economic matters. The Government statistics most in need of quality assurance and the improvements that we expect to flow from the new structure lie outside economics, in Home Office matters and spending Departments such as health and education. There is no particular reason why economic considerations should dominate.
 I have spent all my working life dealing with economic matters, whether in the private, public or academic sectors, or in work and, indeed, Parliament. I know, therefore, that there is a tendency if one has an economic training and background to believe that economic issues and arguments are the most important. I am sure that spirit animates the Treasury too, which is perfectly understandable. I am not criticising. Lawyers will always look at points of legal principle and accountants at balance sheets. Economists will be fascinated by economic problems. However, statistics in government are not primarily about economic issues. What seems fundamentally wrong is that the Treasury concern, which is with economic policy, should necessarily dominate the approach to government statistics as a whole.
 The second reason is that the Treasury is not disinterested. The Treasury is a major consumer of statistics, and a funder; in both respects there are potential conflicts of interest. Most serious of all, measurement of the Treasury’s basic performance in its primary function of fiscal policy and of the Government’s performance on the Budget and government debt is critically dependent upon the judgment of statisticians. There was an exchange between the hon. Member for Sevenoaks and the Economic Secretary about that. I make no allegations as to whether the Treasury has exercised improper influence over public finance data in the past, but there will be enormous pressures to ensure that people appointed to the statistical board would give the Treasury an easy ride. That is human nature and nothing to do with the party in power or the present fiscal situation. It would be much better if the Department and the Minister responsible did not have that potential conflict of interest.
The question then arises as to whether there is a better locus of responsibility. I think that there is. That is the Prime Minister, acting executively through the Cabinet Office, which has an overview of Government as a whole in a way that the Treasury does not. There are no obvious and direct conflicts of interests. The Cabinet Office is not a major user of statistics in the same way and does not have a funding role. Although of course Government performance is being measured in its entirety, the Cabinet Office has no direct and acute conflict of interest over its performance, as with the Treasury.

Brooks Newmark: Will the hon. Gentleman answer a question? I remain perplexed. Is the purpose of his amendment simply to follow the current Chancellor from No. 11 to No. 10?

Vincent Cable: That is not the purpose, but I suspect that would be the consequence, which reflects how generous spirited we are, not discriminating or acting against the current Chancellor; we do not know what will happen in the Labour party, but that he would inherit the powers seems likely, were the amendment successful. The hon. Gentleman correctly said that, although I think he supports the amendment.

Brooks Newmark: Another brief question concerns the Prime Minister, who, as well as having a larger remit to his or her responsibility, is First Lord of the Treasury. Does the conflict of interest for the Chancellor also lie with the First Lord of the Treasury?

Vincent Cable: I was never sure about the meaning of the First Lord of the Treasury—

Bill Olner: Order. Do not stray too far.

Vincent Cable: I will not. I was not sure of the answer anyway, so you have saved me an awkward moment.
My final point is that circumstances will arise in which there will be a major challenge to the independence of the board. What is important in those circumstances is that the Minister with residual responsibility has the maximum possible authority. There is no greater authority than that which resides in the Prime Minister. At the moment we happen to have a powerful Chancellor of the Exchequer, but that has not always been and will not always be the case. In the future, Chancellors of the Exchequer may be relatively weak Ministers, who will not be able to stand up to departmental Ministers who have been involved in serious manipulation and use of their Department’s statistics. It is important that we build in institutional checks and balances, which are more properly and effectively vested in the Cabinet Office, and through that the Prime Minister.

Theresa Villiers: I am delighted to be serving under your chairmanship, Mr. Olner.
As we have heard, amendment No. 30 is related to a series of amendments that seek to transfer residual responsibilities from the Treasury to the Cabinet Office. It is a matter of some importance because the responsibilities are significant functions in relation to the new statistical framework.
The Opposition see some of the amendments as a fall-back alternative to our preferred model, which is based on the approach of the National Audit Office. In relation to clauses 3, 4 and 58, our preferred approach is set out in amendments Nos. 176 to 183, to which I will speak later. Those amendments would transfer powers not to another Department, but from the Treasury to the chairman of a powerful new commission of both Houses of Parliament. That would provide the strongest safeguards to ensure real independence from Ministers. However, we are happy to consider the approach set out in amendments Nos. 30 to 42 and 40 to 70 as an alternative on a matter that is subject to the concern of many stakeholder groups. The compromise would not provide the safeguards of our preferred approach, but removing the new structures further from the influence of the Treasury could strengthen the reforms in an important way.
Professor A.F.M. Smith of Queen Mary college, university of London, said that:
“It is important that there be absolute clarity in the separation from ministerial or Treasury authority and influence.
I would recommend therefore that ONS be a Cabinet Office department.”
Ruth Lea, former head of the policy unit at the Institute of Directors, told the Treasury Committee that there was a strong case for locating the new non-ministerial department within the Cabinet Office as a
“much less powerful policy-making department”
with
“a ... broader remit”.
Tom Griffin, former Director of Statistics at the United Nations Economic Commission for Europe, describes the retention of the Treasury link as placing an
“unnecessary limit on the break with the present unsatisfactory arrangements.”
He concluded:
“To sever the link with the Treasury now, and to have the Cabinet Office speak for statistics in Parliament, would be a very visible and important move towards independence.”
Commenting on the Government’s initial proposals, Professor David Rhind of the Statistics Commission told the Treasury Committee that the commission had examined the statutory arrangements for Her Majesty’s Revenue and Customs and how it operated as a non-ministerial Department. The commission did not feel that those arrangements represented a sufficiently significant reduction in ministerial or Treasury authority. That led the commission to conclude that the transfer of residual functions to the Cabinet Office would be a better arrangement.
There are mixed views on the matter. I understand that after much discussion, the Treasury Committee did not support the proposition contained in the amendments. However, the Committee rejected the argument that locating the new Department within the remit of the Cabinet Office would not be detrimental to the Treasury’s ability to co-ordinate and measure a Department’s progress against public service agreements and efficiency targets.
Some of the most serious concerns expressed on the issue focus on the potential conflict of interest that the structure proposed by Government could involve. The Royal Statistical Society, for example, expressed support for a switch to the Cabinet Office on the grounds that the Treasury
“has a particular interest in economic statistics and as a major user is now perceived to exercise influence on ONS’s statistical priorities.
It would further enhance public confidence if the residual ministerial responsibility was returned to the Cabinet Office where it began which would be seen to act as an honest broker across government should any Minister need to be consulted on an issue.”
That is a key concept for the Treasury to consider. Which of the Departments would be the best, most honest broker in reconciling conflicts between Departments?
The Cabinet Office has far less of a vested interest, because it is not a direct consumer of as many statistics as the Treasury, so it is less likely to push the board around and more likely to have a feel for the broader range of priorities across different Departments and policy areas. Lord Moser, the former head of the Government’s statistical service, emphasised in a debate that he initiated in another place that the Cabinet Office’s
“lack of particular subject interest”
gives it
“greater strength over the other departments in our decentralised system.”—[Official Report, House of Lords, 15 June 2006; Vol. 683, c. 407.]
He has also said that he feels that giving it this role would enhance the ability of the new structures to examine issues relating to
“education, health and all the other social areas which are not the direct interest of the Treasury”.
 There is a serious concern that giving residual responsibilities to the Treasury, a major user of economic statistics, may skew the priorities of the statistical services towards the Treasury. If the Cabinet Office were the relevant Department, the Opposition feel that there is more chance that the board and the National Statistician would be free to focus on the priorities of the statistical services, the users and the public interest rather than on the Government and Treasury interest.
On Second Reading, the Financial Secretary was anxious to persuade us that the reforms will cover a wide range of statistics. We will debate that later, but the Opposition feel that the scope should be wider. Although we differ on the extent of the scope of the Bill and the code of practice, there is agreement that the legislation’s focus should not be confined to economic data, which are of primary interest to the Treasury. There is concern that leaving the ministerial home of the non-ministerial department at the Treasury takes insufficient account of the importance of statistics on crime, health and education. As the hon. Member for Twickenham has said, that is often where the most significant problems have arisen.
Tom Griffin, to whom I referred earlier, has said:
“Given the breadth of government statistics (health, welfare, education, migration, crime and so on) the Cabinet Office is the only department that can legitimately speak for them.”
If, as Ministers claim, we are to have a structure that covers departmental statistics as effectively as ONS ones, it makes sense to give residual ministerial functions to the Cabinet Office, which has co-ordination between other Departments as one of its primary tasks and objectives.
The Cabinet Office’s stated objectives include:
“Providing efficient arrangements for collective decision making, including analyses of policy and performance that cut across more than one part of Government, and systems which promote co-ordinated action and presentation.”
Its website also specifically refers to its role of brokering agreements between Departments. The website sets out a lengthy list of areas where it performs that co-ordinating function, for example on e-government, social exclusion, drugs policy, women’s equality and regulatory impact. Professor David Rhind told the Treasury Sub-Committee that a switch to the Cabinet Office would
“assist with coherent planning to meet future statistical requirements.”
Its expertise across Departments would assist in such coherent planning.
Aside from ensuring that the non-ministerial Department and the board are free to set their own priorities, another more important aspect of this is ensuring that the board and the ONS have someone to fight their corner in negotiating with the Treasury on funding. Getting funding arrangements right is, of course, crucial in ensuring that the Bill is successful in granting real independence to statistics. I imagine that there is cross-party agreement on that. We believe that our parliamentary model would solve the problem, with funding determined by a direct parliamentary vote. However, we are examining this proposal as a compromise and fall-back option, and the issue is important in that context.
Everyone is aware of the struggles between Ministers and the Treasury during the funding round. Under the Bill, Treasury Ministers would effectively be negotiating with themselves when it comes to funding arrangements for statistical services. Yes; presumably the board and the National Statistician would have something to say about funding but, if residual ministerial responsibilities are to remain part of the new structure, surely the statistical services deserve a Minister from a different Department to argue their case with the Treasury. Such arguments can be advanced effectively only if they come from a Department outside the Treasury.
Inextricably linked with the debate is the role of the Prime Minister, which has been alluded to already. It is important that the National Statistician has direct regular access to the Prime Minister. I hope that such access is envisaged by the Government, even though it is not stated in the Bill. If the reforms are to succeed in the way in which both Government and Opposition Members want them to succeed, they will need to have political will behind them, and they will need to operate in a way that builds up the authority and political clout of the board and the National Statistician. Ensuring that the National Statistician has direct access to the Prime Minister will play a key part in that strategy, which is another reason why the transfer of responsibilities from the Chancellor to the Prime Minister will help to build and strengthen proposals for independence.
Len Cook, former head of the government statistical service, has said:
“Almost all of the current concerns involve departments where only the Prime Minister has the authority to challenge Ministers, so the Prime Minister needs to have his existing contingent involvement still recognised.”
That issue certainly seems to be at the heart of Lord Moser’s wish to see the Cabinet Office holding the relevant functions that we are discussing. He said to the Treasury Committee:
“In the old days—and I do not say in the good old days, because lots of things are much better now than they were then—the reporting line was through the Cabinet Office to the Prime Minister. This is a very real link. I served three Prime Ministers. I would see the Prime Minister quite regularly and he would take serious interest. That obviously was a great strength, especially vis-Ã -vis other departments. So it was much less difficult to influence other ministries when it was known that behind me was the Prime Minister.”
Lord Moser considers that, since the switch of responsibility for the ONS from the Cabinet Office to the Treasury, the direct link with the Prime Minister has been broken.

Rob Marris: Will the hon. Lady say whether the issue is really about whoever is running statistics influencing the Government, or is it about the Government influencing those who are running statistics? It seems that the latter point is much more important.

Theresa Villiers: In this context, it is important to ensure that statisticians have independence, but, when the National Statistician needs to stand up to a particular Department, having direct prime ministerial backing will bolster them in ensuring that good practice is adhered to. It will help to give authority to the new structures if the National Statistician is seen to have the Prime Minister’s support.
Having read the Hansard report of the announcement of the changes that made the transfer to the Treasury, the Prime Minister of the day envisaged that the National Statistician would continue to have access on the validity and integrity of Government statistics. It would be useful to receive clarification from the Financial Secretary on that matter to ensure that the worries of the National Statistician are heard at the highest level of the Government. For example, how often does the National Statistician see the Prime Minister? Does she have access when she needs it? The amendments that would transfer functions to the Cabinet Office would give a visible signal that the National Statistician has that political backing from the Prime Minister, and that would represent an important improvement in the new framework.

Brooks Newmark: We have heard, and rightly so, from the hon. Member for Twickenham that the Treasury is the greatest producer and user of statistics, and that it should be removed completely from its influence over the board. My hon. Friend the Member for Chipping Barnet has made the point that only parliamentary scrutiny and approval of appointments to the board will give the board the necessary legitimacy in the public’s eyes.

John Healey: That is the next set of amendments.

Brooks Newmark: Is it?
The matter concerns the lack of confidence that the public have in those figures. I want to repeat the point that the Financial Secretary made on Second Reading:
“The House has a central role in and responsibility for the new statistics system”.—[Official Report, 8 January 2007; Vol. 455, c. 23.]
That statement will be true, however, only if the new commission which our amendments would establish comes into being.

David Gauke: It is a pleasure to serve under your chairmanship, Mr. Olner. I want to make a brief point. I am sympathetic to the views expressed by the hon. Member for Twickenham and my hon. Friend the Member for Chipping Barnet. I am a member of the Treasury Committee, which has considered the issue. The Committee concluded that the Treasury should remain a residual Department in this context, but the decision was finely balanced. I must admit that my sympathies lean towards the idea of the Cabinet Office being responsible for the matter.
A starting point is the question whether the Treasury is a major user of statistics. In his evidence to the Treasury Sub-Committee on 14 June, in answer to my question 255, which is set out on page 45 of the evidence in the report of the Treasury Committee, the Financial Secretary made the case that one reason for considering the Treasury to be the correct residual body is the fact that, although many Departments produce statistics that fall within the definition of national statistics, economic statistics are generally of greater importance and frequency than those produced by other Departments. The point that economic statistics are very important is central to his case.
I think that the Financial Secretary is right to say that Office for National Statistics economic statistics are more important than many of the departmental statistics, but that argument leads in a slightly dangerous direction with regard to the Government’s stance on the Bill as a whole. One of the points made by my hon. Friend the Member for Chipping Barnet on Second Reading was that the area most affected by the Bill will be statistics produced by the ONS, which, as Lord Moser has pointed out, is the part of the statistical system in need of the least reform.
The Financial Secretary’s response on Second Reading was:
“It is wrong to assert that the Bill or National Statistics focuses principally on what the ONS produces. The ONS is responsible for approximately 250 national statistics. That leaves a little more than 1,000 national statistics that are produced elsewhere in Government and will be subject to the code”.—[Official Report, 8 January 2007; Vol. 455, c. 44.]
It seems to me that there is a contradiction in claiming on the one hand that ONS statistics will be the least affected by the Bill, and on the other that, effectively, ONS economics statistics are the most important, because they are both important and frequent.
 None the less, if we accept that the Treasury is the principal user of statistics, we can be led in one of two directions. We could argue that the Treasury is indeed the most closely involved; on the other hand, the hon. Member for Twickenham has expressed the view that that is an argument for the Treasury’s not being involved. Without impugning the honesty of the present Treasury, or its predecessors or successors, part of the point of the Bill is ensuring a perception of independence and a lack of political interference in statistics. The bigger the gap that can be created between the Department that is being assessed or scrutinised by the statistics and the producers of statistics, the greater the perception of independence, which seems to be a strong and powerful argument. Even accepting the position of the Financial Secretary that the important statistics are Treasury-related, it seems to be an argument for switching the residual powers back to the Cabinet Office, as was the case until 1989.

Michael Fallon: I reiterate the Committee’s welcome to you, Mr. Olner. I, too, support amendment No. 30. It is true that the Treasury Committee recommended that, on balance, the responsibilities should remain with the Treasury. However, the arguments were finely balanced. There is no finer example of that than the evidence that we took from the Financial Secretary himself on 14 June, when we pursued that point with him. He told the Committee:
“Without being hard and fast about it, therefore, it seems to me sensible to leave with the Treasury whatever residual responsibilities need to be with ministers. As I say, however, we will examine the views that come in through the consultation.”
So I do not think that this is some great issue of principle. Seven months ago, the Financial Secretary accepted that the arguments were reasonably balanced. The Committee went on to say:
“However, if HM Treasury is to retain residual responsibility for the new department, we recommend that the Government consider carefully how it will demonstrate that its proposals will result in a genuinely independent statistics office. What is important is that the new department should be perceived to be more independent than the present arrangement.”
Given that it is not an argument of principle, that is the test that the Financial Secretary has to meet in coming to his preference in the legislation for the Treasury to retain the residual responsibilities. His problem is that, on the face of it, little has changed. The Chancellor appoints the board and the Chancellor sets its funding. That is the current position and it is the arrangement proposed in the Bill.
 The Financial Secretary generously offered to weigh up the consultation and outside views. As my hon. Friend the Member for Chipping Barnet has illustrated, overwhelmingly opinion outside this House among users, academics and those professionally involved in statistics is that it would be better to put the residual responsibility with the Cabinet Office. I take a slightly different view. My conclusion is that there is nothing wrong, per se, with that responsibility staying with the Treasury, and there is nothing particularly preferable about moving it to the Cabinet Office. However, the attraction of the amendment is that it would at least be moved to a Department other than the one that has the responsibility at the moment—it is a different arrangement. We would be demonstrating that we are making a difference, thereby increasing the perception that the statistics office will be more independent than its predecessor.

Stewart Hosie: I shall be brief. This is essentially a question for the Financial Secretary. On Second Reading, in response to a question from the right hon. Member for Birkenhead (Mr. Field), he said:
“He is right to point out that this is indeed the next step in the Chancellor’s reforms of the machinery of economic governance”.—[Official Report, 8 January 2007; Vol. 455, c. 25.]
Given that that is the natural and understandable focus of a Treasury Minister, is there not a real risk that other, non-economic, statistics will be given less prominence than they should have? That is a simple question, but it summarises a large amount of what we have heard in the past 25 minutes or so, and I should be grateful if the Financial Secretary would put our minds at rest and say that that will not happen, given that it is anticipated that the residual responsibilities will remain with the Treasury.

John Healey: I welcome you to the Chair, Mr. Olner; it is a pleasure to serve under you this afternoon and for the rest of the Committee’s proceedings. I pay tribute to the way in which the hon. Member for Twickenham moved the amendment. He set a constructive tone and avoided allowing this debate to become a simple Treasury-bashing exercise.
The Committee has debated what is a serious set of issues and, as the hon. Member for Sevenoaks and the Treasury Committee both recognised, a set of questions about which there are arguments on both sides. My view, as reflected in the legislation, remains as it was when I gave evidence to the Treasury Committee, which is that it is sensible for the residual functions for Ministers under the Bill—and they are residual functions—to remain with the Treasury. The key point in countering that seems to be that retaining ministerial responsibility for the board within the Treasury risks undermining public confidence, in so far as the Treasury, with its particular policy responsibilities, has a special interest in economic statistics, of which it is a major user. In contrast, some of the advocates of change point out that the Cabinet Office does not produce statistics, is not directly a heavy user of statistics and therefore does not have an axe to grind. Some argue that the Cabinet Office might be better placed to take on the residual, but nevertheless important co-ordinating role, in relation to the Government’s responsibilities for and interest in the reformed system.
Three members of the Treasury Committee are serving on our Committee this afternoon. As the Treasury Committee concluded in its report:
“On balance ... the residual responsibilities”
for the board
“should remain with HM Treasury”.
The Treasury Committee noted that the residual responsibilities for Ministers were likely to be limited, and came to the view that the precise location of the new Department was not particularly important, but that it should remain with the Treasury. The Government agree with that, and that is the approach that we are taking.
The important issue is not so much where the residual ministerial responsibilities sit—although I shall explain why the best solution is for them to remain with the Treasury—but the point to which my hon. Friend the Member for Wolverhampton, South-West alluded in his intervention. Our intention is to create a strong independent board, and therefore to remove some of the arguments that the hon. Member for Chipping Barnet made about Ministers in the future, although I shall return to those, too. If the legislation is effective, the question of which Department holds the residual ministerial responsibilities will be of much lesser importance.
Whatever arrangements we contemplate and regardless of which Ministers have residual responsibilities for the board, it is an inescapable fact that the Treasury will always—and rightly—have a role in funding. We have therefore constructed a funding arrangement for the board that, as far as possible, reinforces the independence and freedoms of the board, while retaining—quite rightly, from the public interest point of view—safeguards for value for money, efficiency and spending control. Consequently, I confirmed on Second Reading that the board would benefit from a special arrangement, under which its funding will be set on a five-year basis and will not be determined through the regular pattern of Government spending reviews. Whatever other arrangements are made, funding is one area in which the Treasury will have a continuing involvement and interest with the board and the new system.
The few responsibilities that will remain with Ministers and the Treasury under the new regime are making appointments and maintaining the interface with Parliament, which includes tabling secondary legislation, laying the board’s annual account formally before Parliament and acting as a conduit—as we do currently—for parliamentary questions that are answered by the board or by the National Statistician. Finally, in extremis only, the Chancellor will also have a responsibility to issue directions to the board under the terms of clause 27.
Why do I suggest that the approach in the Bill is the right one and that the residual responsibilities that remain for Ministers are best and most sensibly left with the Minister in the Treasury? The case is as follows. The Treasury clearly does not currently skew the ONS’s priorities towards its own interests and therefore nor would it seek to influence the board in a similar way. The hon. Member for Twickenham opened this afternoon’s debate in Committee by saying that the Treasury has had a good record in distancing Ministers from day-to-day decisions.
Let me turn to the arguments that the hon. Member for Chipping Barnet tried to make. This is the second area of argument that suggests we lead with the Treasury. I have to say that she got it wrong when she argued that the board or the National Statistician somehow need a strong Minister or Department to argue their case with the Treasury. The purpose of the reform is to remove the need for Ministers to argue their case within Government.
Even if that were a legitimate concern, I would urge the hon. Lady to read the remarks of Lord Turnbull—the former Cabinet Secretary—in the House of Lords debate in which, in supporting the proposal that the responsibilities remain with the Treasury, he commented about the Cabinet Office that
“that department has had seven Ministers in four years, and something like nine months in which it did not have a senior Minister at all.”
If the hon. Lady is looking for a strong Department to argue for the statistics board with the Treasury, I would suggest that she look elsewhere.

Theresa Villiers: The point was not based on the relative strengths of the Cabinet Office and the Treasury. Of course the Treasury is a much more powerful Department than the Cabinet Office. The point that I was making is that it is important for statistical services to have a voice external to the Cabinet Office within Government to argue its case for funding. Yes, the Minister is planning to put in place arrangements for funding that are not conventional and are slightly different. However, there will still be negotiation. Therefore, presumably there should also still be a Minister who is able to argue on the same side as the board and the National Statistician.

John Healey: I think that the hon. Lady meant a voice outside the Treasury, not outside the Cabinet Office. The point of the reforms—and putting the new system and the board at arm’s length with Ministers—is that they are not dependent on Ministers arguing their case for them in the normal spending review rounds and that the board itself will have special funding arrangements for its money and other resources.
I should like to suggest the following points to the Committee. Given that the board should be strong enough not to have its strategic priorities skewed by the Department in which the residual ministerial responsibility resides, in addition, the board could benefit from having the Treasury as its link with Government. The Treasury, from the point of view of co-ordinating Government interest in statistics, has a long experience of working with and of understanding statistics. It has a crucial role in co-ordinating the reporting of Government performance and monitoring that across Government.
Therefore, I strongly disagree with one of the points that the hon. Member for Twickenham made, which seemed to suggest that the Treasury was principally or only interested in economic statistics. More than perhaps any other Department, it has an interest in maintaining a good evidence basis, which includes statistics on departmental policies, given the significance of statistics in reporting on departmental performance and understanding the levers for successful reform and the development of public services in which the Treasury has inevitably and increasingly taken an important co-ordinating role.

Michael Fallon: I want to return to the point about funding. I do not think that the Financial Secretary is arguing that there will be no ministerial involvement at all. Of course, the arrangement is special—the review will take place every five years, rather than every three years or annually, and we welcome that—but the BBC has to have somebody to argue with the Treasury. Presumably, every five years the Treasury Minister with residual responsibility will have to support the board in the case that it makes to the Chief Secretary. Will that not be the position?

John Healey: That would depend on which Minister had residual responsibility for the statistics system in the Treasury. The important point is that the statistics board, which is on a separate and special footing outside the normal Government monitoring process, will be in a powerful position to make its own arguments and its own case. Clearly, Parliament will have a view as part of its role in judging and assessing the system’s performance. However, the board and those who are interested in the resources of the statistical system are likely to be in a far stronger position when the five-yearly settlement comes up for renewal if they have direct meetings with the Treasury, rather than playing their arguments through the intermediary of some other Department. That would not be necessary or to the advantage of the board and those who are interested in ensuring that it and the system are strong, significantly independent and authoritative.

Mark Hoban: Would the Financial Secretary characterise the relationship between the ONS and the Treasury as regards funding as good? The impression that one gets from the evidence of the Public and Commercial Services Union to the Treasury Committee is that there is actually a very poor relationship between the ONS and the Treasury as regards funding. There have certainly been critical comments about some of the savings targets that the ONS has agreed with the Treasury, and reference has been made to being over-stretched. It appears that there is not a good relationship as regards funding at the moment. Does the Financial Secretary concur with the PCS’s view of that relationship?

John Healey: No Minister would entirely concur with the PCS’s view of the adequacy of funding or of the plans for the central Government work force—that is the PCS’s job. In the 15 or 18 months that I have been Minister with responsibility for the ONS, I have played an active role, which has had a beneficial impact on the ONS and the resources available to it in that time. On one or two occasions, I have been able to convince my right hon. Friend the Chief Secretary that there is a case for special additional resources. If the hon. Gentleman is interested in judgments on the funding relationship with the ONS, he should probably ask that question elsewhere.
Given the background that I have set out, the Treasury is well placed to play a constructive and co-ordinating role in respect of its residual responsibilities towards the board. Ruth Lea, the director of the Centre for Policy Studies, set out quite openly her reasons for wanting the Cabinet Office to be in charge. As the hon. Member for Chipping Barnet noted, she said that there was
“a very, very strong case”
for locating the new non-ministerial department in the Cabinet Office because it was
“a much less powerful policy-making department”
than the Treasury. If the objective of some, including perhaps Ruth Lea, is to find one of the weaker locations in the Government for these responsibilities, I would suggest that that does not pay due respect to the importance of the statistical system. Such a move may be attractive to some, but I do not think that it would benefit the board or strengthen the reformed statistical system. Following consultation and the report by the Treasury Committee, therefore, I have concluded, as the hon. Member for Sevenoaks suggested, that the Treasury, not the Cabinet Office or another Department, is the appropriate place for these residual responsibilities.
I hope that our debate on this group of amendments has been useful and that the hon. Gentleman will ask leave to withdraw his amendment.

Vincent Cable: I certainly concur with the Minister’s last remark. There have been some good, helpful interventions. The hon. Member for Chipping Barnet developed many of the key arguments in more detail than I did. She also reminded us that there are various options, not just the two that we are exploring. We have not yet considered what will now and for ever be known as the Mongolian option—although I do not want to belittle it—which has a good deal of appeal and is still in play.
The contribution of the hon. Member for Sevenoaks was particularly important, because he played a key role in the Treasury Committee report, which had not decided against the option of using the Cabinet Office as the point of reference. He helpfully reminded us that that Committee’s recommendation was not only finely balanced, but was predicated on certain assumptions about how the legislation would be framed and would give greater strength to ministerial statisticians than the current legislation does. It would work similarly in other respects, too. As the hon. Gentleman has reminded us, it is not helpful to take the conclusion of the Treasury Committee out of context. His punch line, which was original, was that shifting responsibility from the Treasury to somewhere else credible would be quite a powerful statement of independence.
In his response, the Minister quoted various external sources of opinion, which we need to heed. I have particular respect for Sir Andrew Turnbull, because we started our professional lives together four decades ago in east Africa, trying to improve the quality of economic statistics there. So we have been over this ground before. He was taken slightly out of context, because whereas it may be true that there has been a rapid turnover of permanent parliamentary under-secretaries and Ministers of State in the Cabinet Office, the key point is that its political authority rests on the Prime Minister. This Prime Minister has been in office for the longest time in recent history, so whatever the current problems are they are not to do with turnover in relation to its authority. The same point could be made in respect of Ruth Lea. The issue is not the Cabinet Office as a relatively modest civil service department, but the political head of the Cabinet Office, who is the Prime Minister.
The Minister was open minded, as all Committee members have been, in accepting that there are other options. He was fair minded in acknowledging that there are pros and cons. His key argument, as I understand it, is that because the board will be independent it does not matter which Department has the residual powers. However, although it is independent up to a point, the Minister makes the key appointments. We need a source of authority whose appointments are clearly and totally disinterested. The present arrangements do not seem to be the optimum.
To bring my remarks to a conclusion, I am not proposing to put the amendment to a vote. It is not that I am satisfied with the answers, because I am not. However, this issue requires further debate and exchange. There are quite a few ex-Ministers on both sides of the House who will want to pool their experiences of different Departments dealing with statistics. People in the other place have a great deal of direct experience. Lord Moser is the obvious person, because he operated under a system where the Cabinet Office had authority. It is important that those arguments are heard before we come to closure. In that context, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mark Hoban: I beg to move amendment No. 176, in page 2, line 3, leave out ‘Treasury’ and insert ‘Chairman of the Commission’.

Bill Olner: With this it will be convenient to discuss the following amendments:
No. 177, in page 2, line 4, leave out ‘Treasury’ and insert ‘Chairman of the Commission’.
No. 186, in page 2, line 5, at end insert—
‘(3A) No appointment shall be made under subsection (2) until it has been approved by the Commission established under section (Establishment of a Commission for Official Statistics).’.
No. 187, in page 2, line 5, at end insert—
‘(3A) Appointments made under subsection (2) shall be subject to review by the Commission established under section (Establishment of a Commission for Official Statistics) within one year of their having been made.
(3B) The Commission shall produce a report on any review carried out under subsection (3A) and shall lay it before each House of Parliament.’.
No. 178, in page 2, line 7, leave out ‘Treasury’ and insert ‘Chairman of the Commission’.
No. 179, in page 2, line 9, leave out ‘Treasury’ and insert ‘Chairman of the Commission’.
No. 180, in page 2, line 11, leave out ‘Treasury’ and insert ‘Chairman of the Commission’.
No. 181, in clause 4, page 2, line 29, leave out ‘Treasury’ and insert ‘Chairman of the Commission’.
No. 182, in clause 4, page 3, line 3, leave out ‘Treasury’ and insert ‘Chairman of the Commission’.
No. 183, in clause 58, page 28, line 17, leave out ‘Treasury’ and insert ‘Chairman of the Commission’.
New clause 2—Establishment of a Commission for Official Statistics—
‘(1) There shall be a commission name the Commission for Official Statistics (in this Act referred to as “the Commission”) for the examination of the production, release and presentation of official statistics.
(2) The Commission shall consist of six members of the House of Commons appointed by the House of Commons and six Members of the House of Lords appointed by the House of Lords, none of whom shall be a Minister of the Crown.
(3) The Commission shall, from time to time, present to each House of Parliament a report on the exercise of its functions.
(4) Schedule (Commission for Official Statistics) to this Act shall have effect as regards the Commission.’.
New schedule 1—
‘Schedule 1A
Commission for Official Statistics

None

1 (1) Subject to paragraph 2 of this Schedule, a member of the Commission shall vacate his office—
(a) if he ceases to be a Member of the House of Commons or the House of Lords;
(b) if another person is appointed in his place.
(2) Subject to sub-paragraph (1) above, a member of the Commission shall hold office for the duration of the Parliament in which he is nominated or appointed and for a further period provided by paragraph 2 of this Schedule.
(3) A member of the Commission may resign at any time by notice to the Commission.
(4) Past service is no bar to nomination or appointment as a member of the Commission.
2 (1) Subject to sub-paragraph (2) below, on a dissolution of Parliament, the members of the Commission shall continue in office until members are nominated or appointed in their place.
(2) Where at any time after Parliament has been dissolved, it appears that a member of the Commission who is not a Member of the House of Lords—
(a) has not been validly nominated as a candidate in the ensuing general election; or
(b) although so nominated, has not been elected as a Member of Parliament at that election
that member shall resign from the Commission forthwith; but nothing in sub-paragraph (1) above or this sub-paragraph shall be taken as preventing any such member from resigning otherwise than in pursuance of this sub-paragraph.

None

3 The Commission shall elect a chairman from amongst its members (in this Act referred to as “the Chairman of the Committee”).

None

4 (1) The validity of any proceedings of the Commission shall not be affected by any vacancy among the members of the Committee or by any defect in the appointment or nomination of any member.
(2) The Commission may determine its own procedures.
(3) The Commission may appoint one of its members to act as chairman at any meeting of the Commission in the absence of the elected chairman of the Commission.’.

Mark Hoban: It is a pleasure to serve under your chairmanship, Mr. Olner.
In his closing remarks on the previous group of amendments, the hon. Member for Twickenham said that other models were available. He called the one that we are discussing the Mongolian model; that would establish a structure similar to that of the NAO asa means of governing the statistics board and theONS.
I would prefer not to call it the Mongolian model; we could use a word much closer to home—[Interruption.] We could call it the Blackburn model. In 1995, the right hon. Member for Blackburn (Mr. Straw), now the Leader of the House, said in a speech:
“The National Statistical Service should be placed at arm’s length to Ministers on a similar basis to that of the National Audit Office, and should report principally to a powerful Committee of the Commons”.
We should give the right hon. Gentleman the credit for identifying that model, and refer to it as the Blackburn model. Why did he suggest that that might be the right approach for the governance of the new board? He did so because the NAO is recognised for its independence from the Government; that independence is created not just through its robust reports to Parliament on how taxpayers’ money is spent, but because it is seen to be demonstrably at arm’s length from the Treasury and all other Government Departments.
 The National Audit Act 1983 established the Public Accounts Commission, which is responsible for the appointment of the Comptroller and Auditor General and determining the funding of the National Audit Office. Following that model will best ensure that the new board establishes a reputation like that of the NAO. This is the best opportunity to enshrine the independence of national statistics and put them at arm’s length, not only from the Treasury—this is not about Treasury bashing at all—but from all Government Departments.
 The new clause and schedule replicate the wording of the 1983 Act. They would set up the commission and establish how its members were appointed. However, I should like to draw attention to the crucial difference, in respect of commission membership, between the model proposed by the new clause and schedule and that introduced by the 1983 Act. The Public Accounts Commission is drawn from Members of this House. However, interest in statistics’ importance, use and accuracy, and how they are used to hold the Government to account, is felt not only in this House, but in the other place. We feel that the other place should be represented in the commission. Many Lords have an interest in the issues; Lord Moser’s views have already been referred to in the context of that wider interest.
We believe that the model is right; it has proved to work with the NAO. The NAO seems independent of the Government and we should consider how to apply its model to the board and its executive and scrutiny functions. Why might that not be right? In his evidence to the Treasury Committee, the Minister touched on one potential reason when he said that the NAO
“has a very particular role in supporting Parliament's proper scrutiny and accountability function in relation to the executive.”
He went on to say that
“the purpose, the value, the users of national statistics, go very much wider than Parliament.”
He was right; no one would disagree. However, we should also ensure that we do not minimise the vital role of statistics in enabling Parliament to hold the Executive to account.
For example, measuring the number of children achieving five or more good GCSEs does not just provide data to parents, schools, employers or local councils; it helps hon. Members to hold the Government to account on their own policy goals. Data on productivity will help us to decide how the Chancellor is doing by what he refers to as the fundamental yardstick of economic performance. Without accurate, robust data, it is difficult for us to hold the Government to account. The distinction between the role of the National Statistics Board and that of the National Audit Office is perhaps not as great as the Minister indicated.

Rob Marris: Many other hon. Members and I use information from the diplomatic service to hold the Government to account on their foreign policies. Does the hon. Gentleman suggest a 12-person commission should run the diplomatic service because it generates information that Members use to hold the Government to account? That seems to be the thrust of his argument about statistics.

Mark Hoban: I can see the point that the hon. Gentleman is making—

Bill Olner: Order. It was a point, but it was a bit wide of the mark.

Mark Hoban: Mr. Olner, you pre-empt me in that comment. I would not wish to tread down that path, although I am grateful for your guidance. There is a distinction. We are talking about data that can be measured—information about aspects of life that can be measured and need to be collated—and there is an issue about how to measure, report and produce that data accurately. That might be slightly different, I suspect, from some of the diplomatic service information to which the hon. Gentleman refers. To use your words, Mr. Olner, he is rather wide of the mark.
We propose that a commission, rather than Her Majesty the Queen on the Prime Minister’s advice, should appoint the National Statistician. The decision would be made on the basis not of the Prime Minister’s advice but of the advice of Members of this House and the other place. It would give the National Statistician some independence. He would not be beholden to the Government on reappointment, so he would be seen to be independent of the political process. It is important for him to be able to undertake his professional responsibilities without having to look over his shoulder to Government.
Our proposals would meet the concerns of the Society of Business Economists, whose evidence to the Select Committee said that the appointments process needed to be
“as independent, and perceived to be as independent, as possible”.
The amendments would take the appointment out of the party political arena and enhance the accountability of national statistics to the House.
A recurring theme on Second Reading was how to increase parliamentary scrutiny of statistics, and various models were proposed. The hon. Member for Southampton, Test (Dr. Whitehead) suggested that we could use as our model the Speaker’s Committee on the Electoral Commission, and that model has advantages—for example, questions about the committee’s operation can be tabled in the House. My parliamentary neighbour, my hon. Friend the Member for Gosport (Peter Viggers), answers questions on the committee’s behalf in the House once every four weeks. The committee also scrutinises the commission’s funding and business plans, ensuring that its funding is kept at arm’s length from the political process. That model differs from our proposed model in that it does not appoint members of the Electoral Commission. It does not go as far as the amendments would.
Last week, a number of hon. Members questioned whether existing scrutiny of statistical issues through Select Committees was sufficient, as we cannot set up Select Committees through legislation. The ONS is scrutinised at the moment by the Treasury Sub-Committee, but that does not necessarily ensure the full breadth of coverage. With a commission, a wider range of scrutiny might be possible, but that indicates why a Select Committee would not give the same independence as a commission for official statistics. A Select Committee could scrutinise the financial plans of the board and the ONS, but it could not determine their level of funding. Although it could have an important role in enhancing the independence of the statistician, board and ONS, it would not go as far as the NAO model that we are proposing.
 In conclusion, the NAO model would achieve two key goals: it would remove the residual power of the Treasury to appoint the National Statistician and the board and move funding away from the political process so that it would not be accountable or beholden to the Treasury. Earlier, I intervened on the Minister regarding remarks made by the PCS about the ONS. I have to say that from the submission of the PCS to the Treasury Sub-Committee, I was not entirely clear whether it felt that the ONS’s funding problems were the responsibility of the ONS board or the Treasury. As the Minister said, that is a question for somebody else.
I see no evidence in that submission, however, to suggest that the current method of funding is satisfactory. A commission set up to appoint the National Statistician and board and to determine funding would be the best means by which to ensure independence and restore trust in statistics. That would send a clear signal that statistics in the UK are independent of the Government, particularly in respect of the scope of the Bill. I commend the amendment to the Committee.

Rob Marris: I formally welcome you to the Chair, Mr. Olner.
To develop my earlier point, and to respond to those made by the hon. Member for Fareham, it is inherent to the function of the NAO that it hold the Government to account by scrutinising their actions, and particularly their spending. That is not inherent to the function of the statistics board, which instead marshals information that others may use in order to hold the Government to account.
Please bear with me, Mr. Olner, while I draw a fair analogy. If I asked an ambassador whether they had made representations to their country about breaches of human rights and that ambassador said no, I could use that information to hold the Government to account for their failure to instruct their diplomats to make such representations. The statistics board produces, and checks the quality of, information, which may then be used by others—and properly so—in this House and outside in order to hold the Government to account. In shorthand, it is an information generating or marshalling body, whose information is used by others.
As I understand it, the position of the NAO is very different. It is an inherent part of the scrutiny mechanism—it scrutinises the spending and actions of the Government. Were the hon. Member for Fareham, in whose name the amendments stand, to adopt a logical position, he would either abandon them or agree that the diplomatic service itself should be supervised by a commission made up of 12 members—six from each House.

David Gauke: I shall speak to amendments Nos. 186 and 187, which stand in my name, and to which one or two Opposition Members have been anxious to speak.
Amendment No. 186 would establish a requirement that the appointment of non-executive members of the statistics board be approved by the commission for official statistics, to which my hon. Friend the Member for Fareham referred. The concept is not dissimilar to the Senate hearings that take place in respect of various appointments.
Amendment No. 187 would put in place a reporting system similar to that which currently exists through the Monetary Policy Committee of the Bank of England. That committee holds hearings in front of the Treasury Sub-Committee, which makes a report on a proposed appointment but does not have a right of veto. That is essentially the model that the amendment follows. I would prefer amendment No. 186 to be accepted, but amendment No. 187 presents an alternative.
Both amendments neatly complement the Blackburn model, as my hon. Friend called it. That model would give Parliament a greater role in appointments, which are a key part of the overall statistics system. That does not necessarily mean that the Blackburn model must apply in its entirety for the amendment to be appropriate, but I have used that model because it would allow for the creation of the commission for official statistics, which would be a convenient body to review statistical matters. There could alternatively be parliamentary proceedings to do much the same thing, but I felt it important to suggest an addition to the Bill and considered that the model I chose presented the best opportunity to do so.
I know what the Government’s position will be on the Blackburn model as a whole, but there are two reasons why they should receive the amendments with a degree of sympathy. First, the Bill’s intention is to create greater independence and a greater perception of independence for statistics. One of its weaknesses is the fact that the Treasury will have enormous appointment powers, specifically the ability to appoint a minimum of five non-executive directors other than the chairman. The chairman will be appointed by Her Majesty under the Crown prerogative but presumably with significant advice from the Treasury.
We are concerned about the appointment powers that the Treasury will have, which the Bill does nothing to restrain. There is no provision to prevent members of the board from serving a number of terms. There are always arguments to be had about term limits and so on, and I am not necessarily putting the case for them, but one could argue that a member of the board wanting to renew his position would be under pressure not to upset the Government. Perhaps that is unduly cynical, but we are considering perceptions and it is an issue to consider. If we wish to improve the independence of statistics, giving Parliament a role in the appointments process seems sensible. A right of veto would be stronger than a right to report, but either would be a step in the right direction.
The second reason why the Government might greet the amendments with some degree of sympathy relates to the larger issue of reforming the royal prerogative, a desire that I believe is shared in all parts of the House. The Chancellor of the Exchequer indicated in his interview with Andrew Marr in the new year that a Government led by him would rebalance the relationship between the Executive and Parliament and consider areas in which the royal prerogative could be reformed. Most of that debate has focused on Parliament voting before we go to war, but that happens relatively infrequently, even under this Government. Appointments happen much more frequently.
 The hon. Member for Wolverhampton, South-West has raised the issue of Parliament and the diplomatic service. Clearly, the diplomatic service reporting directly to Parliament would not be appropriate, and such a Blackburn model—

Bill Olner: Order. I have already ruled on that.

David Gauke: My point is that if we want to rebalance the relationship between Parliament and Executive, which my amendments attempt to do, a role for Parliament in appointments, be they of members of the statistics board, diplomats, ambassadors or high commissioners, could be hugely important and valuable. The idea of Senate-style hearings before appointments are made by the Executive might be very helpful.
 It is worth considering that even if my amendments were accepted, or if the Government were to make alternative proposals along such lines, considerable powers would still be left in the hands of the Treasury, which would still have the opportunity to initiate appointments or to come up with names. A parliamentary Committee would not interview or canvass opinion on a wide range of candidates, because Parliament would be presented with a name and given an opportunity to say yes or no.
Likewise, when we come to the number of non-executive members, the Treasury can create a large number of members of the board, if it wishes to dilute the power of a difficult individual, which is a point made earlier today. In that case, short of using the veto powers in amendment No. 186, Parliament would not be able to do anything, because residual powers would be retained within the Treasury. None the less, if the Government want to increase independence and take the opportunity to rebalance the relationship between Parliament and the Executive, I hope that the Financial Secretary will sympathise with the thrust of my amendments. Here is a clear opportunity to improve parliamentary accountability and the standing of Parliament and, in so doing, aid the Government’s laudable objective of improving independence within the field of statistics.

Brooks Newmark: I will begin where I ended, because, as the Financial Secretary was kind enough to point out, I pre-empted myself in my previous remarks.

Michael Fallon: My hon. Friend was giving the Committee some pre-release access.

Brooks Newmark: Yes, but it involved less than the half hour that the President of the United States gets.
As I have pointed out, the Financial Secretary said this on Second Reading:
“The House has a central role in and responsibility for the new statistics system”—[Official Report, 8 January 2007; Vol. 455, c. 23.].
That is essential to our argument and is the point that drives new clause 2. Surely only through parliamentary scrutiny and approval of appointments to the board will we get the necessary legitimacy in the public’s eyes. The real issue behind our debates in the next seven sittings is public confidence in the numbers that are released, which is what we are trying for.
Anything that removes the Treasury as much as possible from decision making or influence, whether it is over appointments to the board or whether it is over saying what is good or not, has to be a good thing. The point is not that the Treasury is dishonest, but that it is the greatest user and consumer of Government statistics. That is what drives new clause 2. I believe, as do my hon. Friend the Member for Fareham and, I hope, my other hon. Friends, that a separate commission will allow two tiers of scrutiny. The board’s oversight of operational matters and parliamentary scrutiny will lock integrity into official statistics, which is the best solution to the current problem of the muddled responsibilities identified by the Royal Statistical Society.

John Healey: We have had another constructive and useful discussion. I am especially glad that the hon. Member for Braintree shared his full remarks with the Committee on this occasion. As we have heard, the amendments, the new clause and the proposed new schedule would have two main effects. First, they would establish in statute a commission for official statistics that would be a Committee of both Houses. Subsequently, they would assign to it several roles, including appointments of board members. While we shall deal in more detail with amendments on appointments and on funding, those proposals would significantly alter the accountability model proposed under the Bill. It is useful to examine the principles on which appointments, funding or governance in general should be based to reflect the function and the role that we expect the board to play.
I shall deal with governance as we want to construct it under the Bill, after which I shall turn to the proposals advocated by hon. Members. On the principles, statistical production is as an Executive function, which is appropriately located within Government rather than within Parliament. As has been acknowledged by the Committee, statistics are a public good that serve a wide range of users and interests. That point was supported in our public consultation and by the Treasury Committee in its report earlier this year.
The second principle is that, while there is no overriding international precedent or principle for the organisation of statistical systems, an almost universal feature is that the production of statistics sits with the Executive, with the one exception of Mongolia. A central pillar of our model is the production of statistics as a responsibility of the Executive.
The third important principle is that the monitoring and auditing of the statistics system is carried out by the independent board that requires a non-Executive majority that is capable of reflecting the expertise and experience of a wide range of statistical users and interests in such a way that it is impossible to envisage Parliament doing, even with the combined expertise of both Houses.
The fourth component is that Parliament’s role in the model is to hold to account all those involved in or responsible for the operation and aspects of the system. That is rightly the role that Parliament plays in relation to other executive functions of Government that are devolved or overseen by independent boards, such as the Food Standards Agency. A commission for official statistics that is established in statute, that is composed of Members of both Houses and that has a role in funding and appointments would therefore complicate the system of governance and Parliament’s role in it, and it would not assist in achieving the overall objectives of the Bill.
Let me set out the principles on which the model proposed by hon. Members is based and the flaws in it. In expressing his interest, the hon. Member for Fareham referred to the National Audit Office and the Electoral Commission. It is true that there are a limited number of other areas where there are commissions of the type proposed in the new clause and new schedule; for example, the Public Accounts Commission, which scrutinises the work of the NAO, and the Speaker’s Committee, which oversees the work of the Electoral Commission. However, there is an important principal difference with the statistics board and what is proposed in the new clause and new schedule.
The Speaker’s Committee and the Electoral Commission, and the Public Accounts Commission and the National Audit Office, are involved in the scrutiny of fundamentally different organisations and issues, neither of which are the responsibility of the Executive. Consequently, those models are not appropriate ones on which to base an accountability regime for the statistical system. The functions of both the NAO and the Electoral Commission are to serve and support the legislature in carrying out specific roles. Therefore, neither example is appropriate in the case of statistics.
The Public Accounts Commission’s primary role is to examine the NAO estimates, and it was established in a manner akin to the proposed commission for official statistics. As I have said, the role of the NAO is quite different from that of the statistical system. The NAO has a particular role in ensuring that Departments achieve the required value for the money, and a particular responsibility for assisting this House in ensuring that the resources authorised by it to Departments are properly spent.
 Equally, the Speaker’s Committee, which scrutinises the expenditure and income of the Electoral Commission, was established because of the special role that the Electoral Commission plays in relation to this legislature. The commission is set up to establish and assess the integrity of the conduct and administration of elections to this House and of referendums. Elections to Parliament and the expenditure of moneys voted by it are constitutional matters and are fundamentally different from the production of statistics by the Government, so the governance and accountability models proposed in the Bill are rightly and appropriately different.
On the basis of those principal points, let me turn specifically to amendments Nos. 176 and 177, which would allow the chairman of a commission for official statistics to appoint the non-executive members of the board. That is inconsistent with the board’s executive function, and Parliament should not interpose on executive appointments in that way.
As has been mentioned a couple of times, a recent Treasury Committee report stated that public perceptions about the independence of the board will depend more on the actions of board members than on the method of their appointment. I agree with that, and I believe that the involvement of Parliament in the appointments process, as proposed in the amendments, would skew and confuse the accountability model. For those reasons, I cannot accept the amendment, and I hope that in the light of this debate the hon. Member for Fareham will withdraw it.
The amendments tabled by the hon. Member for South-West Hertfordshire are a different approach to the same issue. Giving the commission a role in approving appointments would be inconsistent with the board’s wider executive function. It is appropriate that Ministers play a role in appointments, because it is an executive function. For clarity, I shall confirm to the Committee what I said before: we will make appointments entirely in line with the guidance of the Commissioner for Public Appointments. In its report, the Treasury Committee said that that would be sufficient to ensure the independence of the appointments process.

David Gauke: The Minister considers it inappropriate for Parliament to play a role in the appointment of persons performing an executive function. Does he hold that position in principle? If so, will he explain why?

John Healey: I have tried to explain to the Committee that that position follows from an attempt to draw out the principles of a proper accountability model. It is worth pointing out that even without the hon. Gentleman’s amendments, Parliament will be able to review the appointments and report its findings as part of the discharge of its responsibility to hold to account the overall operation of the reformed system.

Theresa Villiers: Briefly on that point, is the Minister prepared to consider the confirmation-hearing model? Before the appointments were finalised, Parliament would have the opportunity to question the candidates.

John Healey: That is not a matter for the Government. On this Committee there are three distinguished members of the Treasury Committee, and it holds confirmation hearings for appointments to relevant bodies.
 On the subject of the hon. Lady’s new clause and new schedule, I hope that the deliberations of this Committee are a prompt that helps to inform the debate about how Parliament must organise to discharge its functions and responsibilities under the Bill. She may want to ensure that her arguments form part of those discussions in this House and in another place.
Turning to new clause 2, I have said clearly and more than once that under the new arrangements we expect Parliament and the devolved legislatures to play the central role in holding the new system to account. The Bill makes provision to ensure that they can do so. However, Parliament must decide how best to hold the statistical system to account, and it must decide in particular on the arrangements that it wants to put in place so that it can do so.
I see some merit in the proposal for a Joint Committee of the two Houses, although it is not a matter for me as a Minister. It would enable both Houses’ expertise and interest in such matters to be played in, and it would allow their breadth and depth of expertise to play a part in the strong and proper scrutiny of the system. However, I do not want to establish the proposal in statute. Ultimately, it would reduce the flexibility and discretion of Parliament to set up the arrangements that it saw fit and to refine them in light of experience.
At the outset this morning, the hon. Member for Sevenoaks reminded us that statistics legislation is rare in this place, and that the last major statistics legislation was debated 60 years ago in 1947. So, to set arrangements for the discharge of the scrutiny and accountability functions of this House and Parliament in primary legislation would risk introducing a counter-productive degree of inflexibility.

David Gauke: I note the Financial Secretary’s comments about giving greater flexibility to Parliament. If we were ever to give a veto power on appointments to Parliament, it would need to be contained in statute. I return to a question I raised earlier: whether he was objecting to Parliament ever having a veto role on executive functions. Does he not accept that in many countries, the United States in particular, using a veto is precisely what the legislature is able to do?

John Healey: As we are talking about an executive function, I have explained that it is right that Ministers play the role in the appointments process that we are proposing.
In conclusion, Parliament’s role will be central. Unless I have missed significant discussions that have been going on, Parliament has still to come to a considered view on how best to approach this. Legislating for a commission would prevent the sort of developments that have been seen in recent years in Parliament: trialling certain arrangements, reviewing them in Parliament and then refining, strengthening and reinforcing them. Including such an arrangement in this Bill would prevent precisely that sort of approach in the future.
It is important for the proper and strongest possible discharge of Parliament’s scrutiny function that it can adapt and develop further in the light of experience. I hope that the hon. Members who have tabled these amendments, new clause 2 and new schedule 1, and proposed setting up a commission for official statistics, will consider the matter further, having listened to the debate, and will not press them to a Division.

Mark Hoban: May I thank the Financial Secretary for the way in which he explained his perspective on the amendments and for the way in which the parliamentary scrutiny of the board will be conducted? He was right to say that he expects Parliament to play a central role in holding the statistical system to account.

John Healey: The central role.

Mark Hoban: I am grateful to the Financial Secretary for correcting my grammar. I do not think that there can be more than one centre.
In a sense, part of the problem with our debate on this group of amendments, new clause 2 and new schedule 1 is that we are having half a debate, because we cannot, in primary legislation, set out the detailed arrangements for Select Committees, for example. That is a House matter, so it will be debated on the Floor of the House. We almost need to have a debate running in parallel to this one to tell us how parliamentary scrutiny should work and how Members should expect it to take place.
While it is not in the Bill’s power to determine what parliamentary scrutiny there should be beyond the proposals in this group of amendments, in a sense, by speaking against new clause 2 and new schedule 1, the Financial Secretary is setting a limit on the way in which Parliament can deal with the funding and the appointment of the board. He is effectively saying that Parliament will not be able to appoint the board or to determine the funding. The way in which Parliament will hold the board, its members and the way in which it performs its functions to account is being constrained by the Bill.
The Financial Secretary was right to say that we seem to have a Bill on this matter once every 60 years. I am sure that if more detailed arrangements were put in place, such Bills might be more frequent, to allow us to adjust to circumstances. This Bill sets a limit to parliamentary scrutiny. We ought to have a parallel debate in the House to the one that is taking place in this Committee. I suppose that that is a good argument for not pushing the amendment to a vote at this point, because it is important to see how the debate on parliamentary scrutiny develops over the coming weeks.
The Minister set out clearly in his opening remarks the various functions of the board and highlighted its responsibility for the production of statistics, which is the executive function. He also highlighted the monitoring and auditing role that the board will play, although we shall come to the detailed arrangements for that in later clauses. One of the Minister’s arguments—which I shall characterise to make a point—for why the proposed route is not the best route to go down is based on the existence of those executive responsibilities within the board. Some have argued that if a different structure had been proposed, whereby the board’s oversight role was separate from the production of the statistics, the NAO model would be appropriate, in respect of the board exercising its oversight role. The way in which the people whom the board appointed to exercise that auditing and monitoring function would be employed and the way in which that oversight role was funded would lend themselves more readily to the NAO model.
It is partly because of the confusion of roles within the board that we have an unsatisfactory means of holding the board to account. The Minister highlighted examples of how the executive function is held to account elsewhere and of how it is funded in other territories and jurisdictions. It is almost because of that confusion of roles that we cannot move to an NAO model to fund the scrutiny and oversight role.
We shall return to that issue, but it is important to recognise that the way in which the two roles have been fused in the board makes it more difficult to come up with a more satisfactory way of having the funding and appointing of the board National Statistician at arm’s length from the Treasury. My hon. Friends will talk about that issue later, but that confusion works its way through the Bill and will affect the practical way in which the board will be held to account. I hope that there will be more opportunities for discussions about how Parliament should hold the body to account, as the Committee debates the Bill and as it goes to the other place. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 ordered to stand part of the Bill.

Clause 4

Non-executive members

Bill Olner: I am advised by my fellow Chairman, Sir John Butterfill, that you may wish to move amendment No. 14 formally, Mr. Fallon.

Michael Fallon: I do not wish to move amendment No. 14, but I hope to catch your eye if there is a stand part debate, Mr. Olner.

Question proposed, That the clause stand part of the Bill.

Michael Fallon: I want to raise three technical, house-keeping points about the clause. I fully recognise that the Minister might not be able to respond to my points on his feet, so I should be quite happy for him to answer them in the course of our proceeding. First, can non-executive members of the board be reappointed? The wording of subsections (1) and (6) leads me to conclude that they can be reappointed, although on first reading of subsection (1), one might get the impression that they can serve only a five-year term. I take it from reading both subsections together that a member can be reappointed, although it would be useful to have that clarified. The explanatory notes on the clause refer to
“the rules for the appointment of, resignation or dismissal of, and reappointment of, non-executive members”.
I hope that I am correct in my assumption, although if I am not, I hope that the Minister can clarify the matter.
Secondly, there is the issue that amendment No. 14 would have raised, and which applies more generally, of dismissal under subsection (4) seeming to be entirely summary. I assume that the non-executive members are not employees. If they are, I am at a loss as to how to reconcile the provision allowing them to be summarily dismissed—I shall not go over the arguments about misbehaviour—without having the normal recourse to the protection of employment law. Perhaps the Minister will advise me that they are not employees, but enjoy a different employment status.
Finally, there is the issue of compensation for dismissal under subsection (5). Having set up the independent board and having been told throughout the debate that it will be independent, that the Treasury will not be running it and so on, I am disappointed to find out that the board is not allowed to deal with compensation for summary dismissal, but that it has to be approved by the Treasury. I understand the reason for protecting public funds, but it does not say much for the independence of the board if it cannot deal with employment matters, which all have to be regulated and directed by the Treasury.

Rob Marris: I want to tuck right in behind the hon. Gentleman on this. Because of the compensation provisions in subsection (5), and without rehearsing the debate on amendment No. 14, I urge my hon. Friend the Financial Secretary to reconsider subsection (4)(d) and adopt the Fats Waller approach—“Ain’t Misbehavin’”. The word should be removed or changed to misconduct. We referred earlier to misconduct. That is a potential minefield, which could lead to the sort of compensation payments that the hon. Gentleman mentioned. That word might be used in a railway or energy Act. As a lawyer, I have to say that it is most unsatisfactory, and I suspect that the hon. Member for South-West Hertfordshire would agree. Misbehaved does not need to be in there; it should say “misconduct” or nothing.

John Healey: Perhaps I can deal with the four points that have been raised now, rather than in writing. On the first point made by the hon. Member for Sevenoaks, yes, non-executive members of the board can be reappointed. It is a feature of the guidance issued by the Office of the Commissioner for Public Appointments. I have stressed that we will follow the procedures and the guidance. If he will permit me to reflect on the need for clarity in the legislation about the fact that reappointment is possible for non-executive members, I shall do so.

David Gauke: For what it is worth, I agree with that interpretation. Does the Financial Secretary share my concern that where there is a power of reappointment, serving members of the board might be perceived to feel some pressure to comply with the person or entity making the appointment—in this case, as it is currently drafted, the Treasury. The benefit of reappointment is that expertise is retained. Does he recognise that concern?

John Healey: I recognise it only in the most conceptual way. In practice, there is a process for the appointment of board members selected by the Treasury through the Office of the Commissioner for Public Appointments, which is well established and well regarded. The Treasury Committee has said that it will give sufficient independence to those appointments. If we get those right, the composition and conduct of the board will rapidly establish its authority and its credibility, and will demonstrate the distance that it has from Ministers—a distance at which it will be able to set the statistical system. The conceptual problem that worries the hon. Gentleman will prove not to be a problem in practice.
On the second point raised by the hon. Member for Sevenoaks. Non-executive members of the board will not be employees. In the event of a problem, they will have recourse to a judicial review or, conceivably, the ombudsman. The answer to his third question is that these are matters not of employment, but of appointment. The Government rightly remain involved in the appointment, as we have discussed, hence the wording of subsection (5)(b).
My hon. Friend the Member for Wolverhampton, South-West has an endearing habit of not giving up on something that he feels is not correct. We had a full discussion this morning, but he is clearly not satisfied with the fact that there are legislative precedents for the criteria concerned. Neither is he satisfied that the provision is an attempt to bring up to date some of the terminology that we use in legislation. As a lawyer, he will know that the equivalent of misbehaviour is malfeasance. Essentially, they mean the same thing. If he is disturbed by subsection (4)(d), I will take a fresh look at it to see whether there is a case for making amendments that could achieve precisely the same effect but avoid the use of the term misbehaviour, which he does not feel is appropriate for use in legislation.

Michael Fallon: I am grateful to the Minister for answering most of those points. I hope that he understands our concern that we want the non-executive members to be as independent as possible; they should not have to be skating carefully all the time. I hope that he will reflect on the drafting, which—I think inadvertently—gives the impression that the members can be reappointed only on the whim of the Treasury and can be summarily fired for the slightest misbehaviour. I am grateful for his offer to re-examine the drafting.

John Healey: Does hon. Gentleman not recognise that the examples that I suggested might constitute misbehaviour were certainly not trivial or light? They were very serious indeed. The concept of misbehaviour as framed in the Bill is by no means a light offence.

Michael Fallon: I understand that. As the rest of the Committee is suggesting, it would have to be reasonably serious to justify summary dismissal. I do not want to over-egg the issue, but when we pressed the Minister earlier he went into the area of misconduct. We spoke this morning of corruption and violence, in which case I do not think that compensation would be paid for loss of office; it would be strange if it were. Today, he has introduced the concept of malfeasance, the proving of which leads down a tricky legal path. I urge him to have another look at the drafting. He may be able to strengthen it in all our interests.

Question put and agreed to.

Clause 4 ordered to stand part of the Bill.

Clause 5

Executive members and other staff

Michael Fallon: I beg to move amendment No. 15, in clause 5, page 3, line 13, after ‘Majesty’, insert
‘on the advice of the Prime Minister’.

Bill Olner: With this it will be convenient to discuss the following amendments: No. 120, in clause 5, page 3, leave out lines 14 and 15 and insert—
‘(b) employed to operate independently of the Board with scrutiny and oversight of the role provided by the Board.’.
No. 188, in clause 5, page 3, line 15, at end insert—
‘(2A) No appointment shall be made under subsection (2) until it has been approved by the Commission established under section (Establishment of a Commission for Official Statistics).’.
No. 189, in clause 5, page 3, line 15, at end insert—
‘(2A) Appointments made under subsection (2) shall be subject to review by the Commission established under section (Establishment of a Commission for Official Statistics) within one year of their having been made.
(2B) The Commission shall produce a report on any review carried out under subsection (2A) and shall lay it before each House of Parliament.’.
No. 16, in clause 5, page 3, line 19, at end insert—
‘(3A) The National Statistician shall have right of direct access to the Prime Minister on any matter involving dispute with a government department.’.
No. 151, in clause 6, page 3, line 34, leave out ‘Board’ and insert ‘National Statistician’.
No. 121, in clause 8, page 4, line 35, at end insert—
‘(4) The Board shall have responsibility to monitor and assess the performance of the National Statistician against the assigned responsibilities.’.
No. 100, in clause 9, page 4, line 37, leave out ‘Board’ and insert ‘National Statistician’.
No. 101, in clause 9, page 5, line 2, leave out ‘Board’ and insert ‘National Statistician’.
No. 102, in clause 9, page 5, line 4, leave out ‘Board’ and insert ‘National Statistician’.
No. 103, in clause 18, page 8, line 15, leave out ‘Board’ and insert ‘National Statistician’.
No. 104, in clause 18, page 8, line 17, leave out ‘Board’ and insert ‘National Statistician’.
No. 105, in clause 18, page 8, line 19, leave out ‘Board’ and insert ‘National Statistician’.
No. 106, in clause 18, page 8, line 21, leave out ‘Board’ and insert ‘National Statistician’.
No. 107, in clause 18, page 8, line 23, leave out ‘Board’ and insert ‘National Statistician’.
No. 108, in clause 19, page 8, line 26, leave out ‘Board’ and insert ‘National Statistician’.
No. 125, in clause 19, page 8, line 30, leave out ‘Board’ and insert ‘National Statistician’.
No. 126, in clause 19, page 8, line 36, leave out ‘Board’ and insert ‘National Statistician’.
No. 109, in clause 20, page 9, line 11, leave out ‘Board’ and insert ‘National Statistician’.
No. 110, in clause 21, page 9, line 20, leave out ‘Board’ and insert ‘National Statistician’.
No. 111, in clause 22, page 9, line 23, leave out ‘Board’ and insert ‘National Statistician’.
No. 112, in clause 22, page 9, line 25, leave out ‘Board’ and insert ‘National Statistician’.
No. 113, in clause 22, page 9, line 27, leave out ‘Board’ and insert ‘National Statistician’.
No. 114, in clause 23, page 9, line 34, leave out ‘Board’ and insert ‘National Statistician’.
No. 115, in clause 26, page 10, line 34, after ‘Board’ and insert ‘and the National Statistician’.
No. 116, in clause 26, page 10, line 35, after ‘Board’ and insert ‘and the National Statistician’.
No. 197, in clause 28, page 12, line 6, at end insert—
‘(d) ensuring that, where appropriate, official statistics provide evidence of local variations and service needs.’.
No. 97, in clause 28, page 12, line 17, at end insert—
‘(5) The National Statistician shall be the government’s chief advisor on statistics, including, inter alia, matters relating to the planning, production and quality of official statistics, and shall provide professional leadership to all persons within government who are engaged in statistical production and release.’.
No. 127, in clause 28, page 12, line 17, at end insert—
‘(5) The National Statistician shall be the government’s principal advisor on statistics and provide professional leadership to all persons engaged in statistical production and publication.’.
No. 80, in clause 29, page 12, line 19, leave out ‘Board’ and insert
‘executive office created under the provisions of subsection (5) below’.
No. 98, in clause 29, page 12, line 22, at end insert—
‘(2A) The National Statistician shall—
(a) coordinate, and promote coordination of, statistical production across government and the devolved administrations; and
(b) take steps to ensure consistency in the production of official statistics across the United Kingdom.’.
No. 29, in clause 29, page 12, line 27, at end insert—
‘(3A) The National Statistician shall have responsibility for promoting—
(a) the co-ordination of statistical planning and production across government departments; and
(b) the production of statistics that are as consistent as possible across the United Kingdom.’.
No. 139, in clause 29, page 12, line 28, leave out from ‘Board’ to end of line 30 and insert
‘shall monitor the National Statistician in the exercise of his functions in relation to official statistics, inlcuding the duty set out in subsection (2A) above.’.
No. 128, in clause 29, page 12, line 28, after ‘may’ insert ‘not’.
No. 129, in clause 29, page 12, line 29, leave out ‘not’.
No. 117, in clause 31, page 13, line 26, leave out ‘Board’ and insert ‘National Statistician’.
No. 130, in clause 36, page 14, line 35, leave out ‘Board’ and insert ‘National Statistician’.
No. 132, in clause 36, page 14, line 40, leave out ‘Board’ and insert ‘National Statistician’.
No. 133, in clause 36, page 15, line 4, leave out ‘Board’ and insert ‘National Statistician’.
No. 134, in clause 36, page 15, line 23, leave out ‘Board’ and insert ‘National Statistician’.
No. 135, in clause 36, page 15, line 25, leave out ‘Board’ and insert ‘National Statistician’.
No. 136, in clause 36, page 15, line 27, leave out ‘Board’ and insert ‘National Statistician’.
No. 137, in clause 36, page 15, line 30, leave out ‘Board’ and insert ‘National Statistician’.
No. 138, in clause 36, page 15, line 31, leave out ‘Board’ and insert ‘National Statistician’.

Michael Fallon: You have conveniently grouped together a large number of amendments, Mr. Olner, only three of which stand in my name. I wish to speak only to amendments Nos. 15, 16 and 29.
 The provisions relate to the status and role of the National Statistician. Amendment No. 15 deals with the way in which the National Statistician is to be appointed. I have tabled the amendment because it is still slightly unclear to me exactly how that appointment is going to be made. The Minister may recall that I pressed the matter twice on Second Reading, and I have still not had a specifically clear answer.
If we look at current practice, the National Statistician, Karen Dunnell, was appointed in August 2005, and the press release from National Statistics described her appointment as:
“The Prime Minister, with the agreement of the Chancellor of the Exchequer, has approved the appointment of Karen Dunnell as National Statistician”.
Subsection (2) is clearly an improvement on that; that is an administrative statement, and we now have in the statute a Crown appointment. However, like all Crown appointments, that appointment can only be made on advice, and the issue with which amendment No. 15 deals is on whose advice the appointment is to be made. 
Lord Moser—the doyen of statistics, the man who served three Prime Ministers—was very clear in evidence to the Select Committee. In answer to question 213, he said:
“If it was left to me, I would have the Prime Minister being given that responsibility.”
That, of course, means not the Chancellor of the Exchequer. In fact, even if one agrees with the Financial Secretary, as the Committee has had to do today, that the residual functions should stay with Treasury Ministers, even as the Treasury Select Committee recommended, there is still a case for making the appointment of the National Statistician a prime ministerial appointment.
If we are serious about restoring trust to the office and its holder, we should be boosting it. It should become one of the big offices of state. I should like the National Statistician to become more of a household name—a key public figure in leading the profession and championing the public interest in statistics. It is worth emphasising the importance of the office and making a distinction in statute about the appointment being in the end the primary responsibility of the Prime Minister—although, of course, the Chancellor of the Exchequer would be consulted.
The Prime Minister makes a number of appointments. I have been checking the people whom he has appointed over the last year and it includes a number of appointments of people who we might not think of as being in the front rank of public figures: the first parliamentary counsel; members of the Judicial Appointments Commission; the non-executive member of the Forestry Commission for Scotland; a member of the Royal Commission on the Ancient and Historical Monuments of Wales; together with perhaps more central public figures, such as the permanent secretaries of the different Departments. When the last permanent secretary to the Department for Education and Skills was appointed, the wording was as follows:
“The Prime Minister, with the agreement of the Secretary of State for Education and Skills has approved the appointment of David Bell to be Permanent Secretary”.
The same wording was followed for the permanent secretaryship to the Treasury itself. There is a parallel, and I think that it is important that we formally emphasise that the new post, placed in statute properly for the first time, is a public figure of the very front rank. We would remove any perception that the appointment remains within the control of the Treasury or the Chancellor. That is the purpose of amendment No. 15.
Amendment No. 16 is designed to make clear that the National Statistician should have right of access to the Prime Minister at all times. I want to emphasise that although you have wisely grouped amendment No. 16 with No. 15, Mr. Olner, it is not necessarily dependent on it. In other words, even if amendment No. 15 falls, and Ministers insist that it should be a Chancellor’s appointment, I would still argue that the National Statistician should have in statute this right of access to the Prime Minister.
Why should the National Statistician have such a right of access? Because, as we have begun to establish today, they need the authority if they are to do their job properly across the system. Lord Moser, who served three Prime Ministers, was quite emphatic about that. He explained to our Select Committee what happened if there were problems in a particular Department. I will not quote his evidence at great length but he gave the example of a dispute with the Department of Health over hospital waiting lists. I do not know whether that arose when he was the chief statistician in the late 1960s or 1970s, but it is clearly of topical interest today.
If there were a dispute between the National Statistician and the Department of Health about the way in which waiting lists were being compiled or the statistics were being announced, Lord Moser said that his first recourse would be to take it up with the statistician—under our decentralised system, the senior statistician in the Department of Health. It also helps that he would have some role in appointing that statistician and, as we shall come to in later amendments, some liaison duty with all the statisticians across the Departments. If he did not get any joy in persuading the statistician in that Department, he said that he would then go to the permanent secretary. If he got no joy from the permanent secretary,
“then I went to my boss. This is important. My boss was the Prime Minister.”
That is the crux. There could well be a dispute between the National Statisticians and different Departments and different departmental Ministers. There has been in the past. Indeed, Lord Moser told us that he resigned privately twice during his period of office. Therefore, we must put the right of access of the National Statistician to the Prime Minister in statute and give the National Statistician real authority across Whitehall.
 I hope that amendment No. 29 speaks for itself. It is slightly different from the supervisory functions that we dealt with earlier today. I think that it has the support of many outside the House, including the statistics users forum. Its objective is that we should give the National Statistician some overarching responsibility to co-ordinate statistics across the decentralised system that the Financial Secretary and I are so keen to preserve and to ensure consistency, not simply across the United Kingdom and the different nations and territories, but between the Government Departments and the different series of statistics that exist.

Theresa Villiers: It is a pleasure and a privilege to follow my hon. Friend and to speak in support of amendment No. 15 and various other amendments in the group. We have a variety of issues to deal with and I hope that the Committee will bear with me as I go through them with some care. There are a number of areas where, even if we are unable to persuade the Minister to accept our amendments, it would be useful to receive some clarification from him. There is genuine confusion among much of the statistical community about how the Bill will operate in significant respects.
The first set of amendments deals with the split between executive and scrutiny functions. The second set seeks to enhance the authority of the National Statistician and to clarify her role. My hon. Friend the Member for Sevenoaks eloquently referred to the way in which it would boost her status. Prime ministerial involvement in the appointment, as amendment No. 15 describes, would play an important part in enhancing that authority.
It is also vital to consider the issue that amendment No. 16 raises about direct access to the Prime Minister. I shall not deal with it at length under the amendments before us, because I anticipated it when we considered the transfer of responsibilities between the Treasury and the Cabinet Office. Instead, I shall highlight the question that I posed to the Minister when we considered the issue during earlier amendments. I asked him to clarify the National Statistician’s current access to the Prime Minister. We heard how Lord Moser was convinced that the link between the National Statistician and the Prime Minister had been broken by the switch from the Cabinet Office to the Treasury. I hope that the Minister will reassure us that the National Statistician still sees the Prime Minister regularly, and that she has access as and when she needs it.
 The first group of amendments starts roughly at amendment No. 100. There should be a clear separation of the executive and scrutiny functions. The Government’s attempt to split the two roles within the board does not go far enough to answer the concerns that a significant number of people expressed during consultation. The executive functions proposed for the board should be removed and transferred to the National Statistician. That is the objective of most amendments in the group; the remainder focus largely on enhancing the authority of the National Statistician.
On Second Reading, the Minister responded to a point that the hon. Member for Wolverhampton, South-West made about actuaries. The Minister said that technical queries about methodology should be directed to the National Statistician, noting that that was how they were currently dealt with and that it would be unlikely to change under the new system. However, to take just one example, clause 9 explicitly requires the board to develop and maintain definitions, methodologies, classifications and standards for official statistics. If his statement on Second Reading is to prove correct, he must support amendment No. 100. It would give responsibility to the National Statistician—to whom it rightly belongs.
The Opposition support the Treasury Sub-Committee’s approach to the matter. It stated that executive responsibility for delivery of statistics should remain with the National Statistician, whom the board would hold to account. Its statement echoed the sentiments expressed by the Royal Statistical Society on this important matter. It said:
 “The National Statistician should be responsible for professional and operational matters and for statistical production. The Board should not be assigned responsibilities integral to statistical production and dissemination as the Bill envisages. It should instead hold the National Statistician to account for these responsibilities so separating the role of statistical producer from the role of monitoring to ensure that the public interest is served.”
Commenting on the issue, a number of people have referred to the independent status of the Statistics Commission, which is separate from the production of statistics. Professor David Martin of the university of Southampton said:
 “It is a matter of concern that this board will be responsible both for the production and quality assessment of National Statistics and no provision is made for a separate quality assurance body, closer to the role of the current Statistics Commission.”
Similar concerns have been expressed by Brian Gosschalk, chief executive of Ipsos MORI, and by Jill Tuffnell, head of research at Cambridgeshire county council. Speaking on behalf of the Central and Local Government Information Partnership, she said that
“the group would like to comment on the need for independent scrutiny of official statistics. The Statistics Commission is just such an independent body. There is no guarantee that the proposed board will be able to act in this way. A much clearer divide is required between scrutiny and operations.”
Making a similar appeal, Will Rossiter, the chairman of the Association of Regional Observatories, said:
“The proposal to combine the executive (production) and scrutiny functions within a single board is problematic. It is unclear as to what form of redress or appeal would be open to an individual or organisation wishing to challenge the decision of the board. The statistics commission should not be abolished if the board is to have executive functions.”
The Committee will be aware that the Statistics Commission has done valuable work in improving the quality and integrity of statistics in the UK, and I acknowledge the achievements of the changes made by the Government in setting it up. However, one of the commission’s strengths has been its independence from the production process, and it is difficult to believe that it could have had the same impact had it been part of the Office for National Statistics. The statistics users forum put it this way:
 “The proposals suggest that the Board of the non-ministerial department has responsibility for both the delivery of statistics and for assuring quality and adherence to standards. We do not believe it is good governance that the same body should be responsible for both functions. Neither is it conducive to restoring or maintaining public trust in the system ... The proposed disappearance of the statistics commission would eliminate a check on the system while replacing it with a system that would appear, at least, to be weaker.”
Although, in the main, the Bill is certainly a step in the right direction, a fact which was acknowledged by both Opposition parties on Second Reading, it is a matter of real concern that this particular aspect of the Bill could be a step backwards—that it could actually weaken some of the safeguards that currently exist.
At the heart of the anxiety that has been expressed about the merging of functions is that the proposed combination of functions will give rise to a conflict of interest. The Select Committee on the Treasury considered that this
“would be likely to have a negative impact on the board’s perceived independence.”
As John Carlin, head of the North East Regional Information Partnership has pointed out, there will be a problem reporting concerns about decisions taken at the ONS because the board’s executive functions will mean that it “will not be detached.” That, at any rate, is how matters will be perceived.

Rob Marris: I wonder whether the hon. Lady could help me by telling me which part of the Bill indicates that the statistics board produces statistics in contradistinction to examining quality, good practices, comprehensiveness and so on?

Theresa Villiers: I am grateful for that intervention. I shall direct the hon. Gentleman to clause 6(1), which says:
“In this Part ‘official statistics’ means ... statistics produced by ... the Board.”
There is another reference, in clause 18, where it says:
“The board may itself produce and publish statistics relating to any matter relating to the United Kingdom or any part of it.”
I think that those are the clearest examples.
It will be perceived that the board will not be detached, and perception is crucial in this matter because the purpose is to rebuild trust in official statistics. The RSS have said:
“Were the Board itself to be involved in the production process then it is difficult to see how it could command the public’s confidence in its ability to monitor statistical production.”
The problem essentially arises because the board will be judge and jury in its own case.
Let us look at what happens when a member of the public or a Member is concerned about a decision taken by the ONS. I shall give an example. My hon. Friend the Member for Havant (Mr. Willetts) campaigned for a number of years about the way in which pension contributions were measured by the ONS and assessed in ONS statistics. In the end, the ONS admitted that he was correct on several points, and it changed its approach, but that took some time.
What if the same situation arose under the new structures? When, for example, my hon. Friend received the initial response from the ONS, rejecting his complaint and asserting that it considered its procedures to be correct, the natural step would have been to make a complaint to the board and to ask for an assessment and review of the decision. Let us assume that the board were sufficiently wise to realise that the ONS had not adequately or appropriately responded.
If the board were to issue a rebuke to the ONS it would, in effect, be talking to itself. The chairman would be in the awkward situation of issuing a rebuke to himself. The board’s standing to hold the ONS to account would be undermined by the fact that the board, as a body, was technically responsible for the decision taking in the first place.
The issue is thrown into stark relief when one looks at it in relation to judicial review. A person who is concerned about practices at the ONS or a decision made by it could in theory decide to apply for judicial review at the same time as making a complaint to the board. However, the board itself would be the relevant body for the purposes of reviewing the decision. Will the Minister confirm whether that is the case?
On Second Reading, I made a comparison with the structure of the BBC. The regulatory and delivery functions of the BBC are mixed in a similar way to the arrangements proposed in the Bill. Concerns have been expressed about the BBC arrangements, including by the House of Lords Select Committee on the BBC’s Charter Review, which called for greater external regulation. The Burns panel, in its independent report to the Department for Culture, Media and Sport, labelled the dual role of the governors as regulator and defender of the BBC “unsustainable”. Clearly, the Hutton crisis has led to a shake up of governance, but controversy remains. How much greater would the controversy attached to the BBC’s governance arrangements be if it had the responsibility for regulating not only its own activities, but the activities of other key broadcasters? That analogy can be applied validly in the context of the statistics board, because of its dual roles in relation to the production of statistics and monitoring the statistical system as a whole.
Now I come to a tricky point relating to clause 29, which I think is one of the more difficult issues that the Committee must address, and I am particularly keen to get the views and guidance of Ministers. A number of interest groups expressed concern that the Bill fails to distinguish properly between the functions of the board and the National Statistician. That is a particular worry in relation to clause 29. Who is to make technical decisions on statistics: the board, or the National Statistician? Take the example of Network Rail given by the Royal Statistical Society in its briefing. Let us assume that the ONS makes a controversial decision relating to the classification of Network Rail liabilities. Clause 29(4) gives the board the power to direct the National Statistician to take a different decision—in essence, the decision of the board can be substituted for that of the National Statistician. Concern has been expressed that that blurs the role of the board and the National Statistician and leaves the line of responsibility for a decision insufficiently clear.
Amendments Nos. 139, 128 and 129, which have the same objective, are designed to clarify the position, so that the responsibility to make a decision rests with the National Statistician, but it can be monitored and reviewed by the board. I hope that the Committee will have the opportunity to consider the issue of the respective roles. Both the RSS and the Statistics Commission have made representations. They say that the board’s role in that context should be to focus on the way in which a decision has been taken—it should consider whether there has been a defect in the decision-making process; whether improper political pressure has been applied; whether the code has been complied with; and whether appropriate transparency requirements have been observed to ensure that outcomes are adequately described and explained to the public. The RSS and the Statistics Commission feel that the board’s sanction should be publicly to highlight its concerns before Parliament, and not to seek directly to overrule the National Statistician.
In some ways, those concerns echo the Minister’s response to the amendment tabled by my hon. Friend the Member for Sevenoaks, which would give the board the power to direct Departments. The Minister indicated that the board should focus not on directing people, but on monitoring and scrutinising how they carry out their functions. The issue is one of some subtlety and there is confusion, which is why I am interested to hear what the Minister has to say. I hope that he will be able to reassure me and those who have raised the concerns, because it is not easy to get to the bottom of the matter.
Another concern about clause 29 relates to subsection (1), which states:
“The National Statistician is also to be the chief executive of the Board.”
The Minister might be able to reassure me, but I do not understand how the National Statistician can be the chief executive of the board when, in theory, there is to be a split between assessment and production roles. My understanding is that the Bill is structured to keep the National Statistician out of the assessment process, but to make her chief executive of the board indicates that she will have important assessment powers as well as her production role. Surely the subsection therefore undermines the split of functions in the board that the Government envisage.
The Opposition tabled amendment No. 80 to attempt to make the National Statistician the chief executive not of the board as a whole, but of the executive office to be set up under clause 29(5). I understand that the Government envisage that the production work carried out by the board will be formally delegated to the executive office, which, in effect, will replace the ONS, which is formally abolished by the Bill. Will the Minister expand on the background to that change and the way in which the delegation will work in practice, to reassure those who are concerned about what they regard as a merging and blurring of executive and scrutiny functions?
 The second big issue raised by this group of amendments is the office of National Statistician. It is a pivotal role in both the existing and the proposed structures for the statistical system. If the reform is to achieve its goals, it is vital that the status and authority of the National Statistician is strengthened by the Bill and that the functions of her office are clearly defined. The reforms must enable her to provide effective leadership of the statistical system. We must ensure that she has real authority and that her views and concerns have an impact right across Government and statistical production. That is why I would be particularly pleased by the strengthening of her position through amendments Nos. 15 and 16, tabled by my hon. Friend the Member for Sevenoaks.
The reforms should make clear provision for the professional authority of the National Statistician. That point was made strongly to the Treasury Committee by the Canadian chief statistician, Dr. Ivan Fellegi. He felt that the role set out for the National Statistician in the Government’s consultation document was weak and saw it as a major defect in the proposals. Some of the amendments in the group are intended to deal with Dr. Fellegi’s concerns, many of which were acknowledged as important by the Treasury Committee.
Amendment No. 97 emphasises the vital leadership role of the National Statistician and would make explicit the fact that she should be the Government’s chief adviser on official statistics, including on matters relating to their planning, production and quality. I hope that that is implicit in the Bill, but those are vital tasks and it would send a strong signal of the status accorded the National Statistician if they were given explicit recognition. Some members of the statistical community have expressed the concern that in the past Governments have failed to engage in effective planning for statistical production. An explicit recognition of the importance of that task would be valuable; if that is not possible, recognition by the Minister today of the importance of the planning process would be welcomed.
 Amendments Nos. 29 and 98 would ensure that the National Statistician’s remit includes the co-ordination of statistical production across the Government and ensuring that the production of official statistics across the UK is consistent. The importance of co-ordination has been emphasised by a range of expert groups. There is grave concern that past efforts to co-ordinate statistical production have been insufficiently effective. Given that the Bill is a once-in-a-lifetime opportunity—statistics Bills come only every 60 years—we should use it to try to put that problem right.
The amendments also raise the question of consistency. Clearly, it is vital that we address the concerns expressed about the fragmentation of UK statistics and the difficulty of obtaining information to cover the whole country. It is extremely welcome that the Bill proposes a framework that is to apply across the United Kingdom. I pay tribute to the work that the Minister must have done to bring that about; it cannot have been an easy political task, and he deserves the Committee’s congratulations.
Lack of consistency has been a significant problem that needs to be solved; the Royal Statistical Society has described it as “serious and worsening”. The chairman of its national statistics working party, John Pullinger, told the Treasury Committee that the problem was so significant that last time around there were three different censuses—for England, Scotland and Wales—instead of a single UK one. During our scrutiny of the Bill, we should try to ensure that the people of Scotland, Wales and Northern Ireland have equal access to statistics produced according to principles of integrity, impartiality and honesty. That is why we welcome the extension of the Bill to the whole United Kingdom. However, if the National Statistician were given the explicit task of promoting the consistency of official statistics across the UK, that would send a visible signal about the importance that the Government clearly attach to the issue.
Amendments Nos. 115 and 116 would impose the efficiency obligations in clause 26 on the National Statistician. Unlike most of the other amendments in the group, which would substitute the words “National Statistician” for “Board”, amendments Nos. 115 and 116 would impose the duty on both institutions. Clause 26 contains sensible provisions on minimising the burdens placed on businesses and individuals affected by statistical collection, and the Opposition will return to that issue at another point. However, given the important role that the National Statistician should play in the production of statistics, it makes sense for the efficiency requirements to apply to her and her office as well as to the board.
I welcome amendments Nos. 118 and 119, which would provide very useful parliamentary input into the appointment of the national statistician. They would enhance parliamentary scrutiny in respect of the statistical system as a whole. In many ways, the reasons for supporting the amendments would be similar to those for supporting the previous group about the importance of hands-on parliamentary scrutiny of the statistical system. The amendments would also give parliamentary recognition to the importance of the role of National Statistician. We want to make hers a household name, and having hearings in Parliament and increasing parliamentary scrutiny of the appointments process would strengthen and enhance the role of National Statistician.

Alun Michael: I should like to clarify something. The hon. Lady referred to amendments Nos. 118 and 119, but they are not in the group that we are discussing.

Theresa Villiers: I might have mixed up the numbers; I meant to say amendments Nos. 188 and 189. I appreciate the right hon. Gentleman’s correction and apologise.
Finally, I appeal to the Minister to assist the Committee by providing clarification on those important questions. I hope that he can allay the fears that I have expressed and those expressed by the many people who are very keen to see the structure work. We want a rational separation of the roles of scrutiny and delivery and to ensure that the Bill achieves its purposes.
Debate adjourned.—[Kevin Brennan.]

Adjourned accordingly at Seven o’clock, till Thursday 18 January at Nine o’clock.